The subject of sales tax is a little confusing for those who are not very familiar with it.
According to Aron Govil This guide will provide a brief understanding on the topic, so you will have a better idea about sales tax payable and its deductions.
Sales tax is a portion of the price that is paid by the buyer to the seller as a percentage of total sales value. This is a type of indirect tax because it is collected from consumer instead of business, who then passes on the burden to consumer. Since sales taxes are regulated at state level, different states levy different rate or percentage for taxing goods sold within their borders. In other words, there is no national law regulating taxation on sale of goods/services. Sales tax rates vary from state to state depending upon different factors such as location, purchase price and type. These taxes are usually not included in base price but they should be considered while making final decision to place an order. Since this is a state regulated tax, it may vary from state to state and even within the same geographical location based on different factors such as location, purchase price, type of goods or services etc.
Sales tax rates are subject to change (they might increase or decrease); however current sales tax rate information will be provided by our sales representative during your checkout process. It is important that you review total amount payable for your order including sales taxes before placing order to avoid any confusion later on. Please note that sales taxes are only applicable if shipping address is located in US. If you need international shipment, no sales taxes will be added automatically during checkout.
Sales Tax Deductions
Aron Govil understand how important it is for businesses to remain profitable. While placing an order, you may ask for a refund of sales tax amount or deductible the sales tax amount from total payable if your business is located in US and shipping address for this order is also located in US (in other words, if both billing and shipping address are same). This way, you will recover some of your money back by avoiding double taxation. Businesses that opt to deduct sales tax amount should provide their valid state resale certificate before processing the order. If you have any questions or concerns about how to apply please contact our customer support team so we can assist your further. Please note that we only process requests made within thirty days after receiving goods under normal circumstance.
Sales Tax Exemption
There are certain states where businesses are not required to pay sales taxes for certain types of transactions. For example, New Hampshire and Oregon do not require business owners to pay any type of sales tax under any circumstances. In some states, online sellers can apply for exemption from collecting state and local use taxes by applying through Streamlined Sales Tax Program. This program does not grant a blanket exemption but rather provides a simple way for small businesses to collect tax on their in-state sales. If your business falls into this category you may still be liable for federal use taxes if Amazon is unable to collect applicable taxes from buyers at the time of order fulfillment.
Tax Summary
There are different types of general taxes levied on goods/services within US which includes:
- General Sales Tax (GST)
- Service Tax (S.T.)
- Luxury Tax (L.T.)
- Transaction Tax (P.T.)
Where S.T., L.T., P.T are imposed by State, GST is levied by Central Government but collected and distributed to the Controller of State Taxes or Sales tax department who in turn distribute it among different states/local govt for further use while S.C has been repealed w.e.from 1st July, 2010 but exemption claims may still be filed till 31st Dec’2011 which means that SSC will come under consideration during sales tax deduction requests made after July 2010 but before December 2011 only if the order was placed before 1st July 2010 but delivered after that time period.
Tax Deducted at Source (TDS)
If your company is registered under Central Sales Tax Act, 1956 you may be required to deduct tax at source while making any purchase from us by providing valid TAN number issued by State Tax Department. We will provide full guidance on how to obtain this certificate if necessary during checkout process. There are some states where GST registration is mandatory for companies who wish to purchase anything over Rs 1 lakh within the state or outside of it in which case you need to consider registering yourself with GST department before placing your first order with us. For all other cases where ‘Condition of PAN based deduction of tax at source’ is applicable, please read below
Conclusion:
It should be noted that we only deduct sales taxes as per above procedures and under such conditions as provided by our policy. Customers should understand that during order verification stage, we cannot know all the specific details of your business or what tax laws may or may not apply to you which ultimately mean that it is customer’s responsibility to follow their legal requirements in terms of state and local taxation. It is also pertinent to note that if a mistake is made while placing an order which results in withholding payment due to invalid resale certificate, lack of TAN/TDS certificate etc – this money will have to be refunded back to buyers within 60 days from the date of payment deduction after doing necessary paper works.
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